Economic efficiency of slavery

For tasks requiring intelligence and independent judgement, for the kind of job where one would ordinarily employ a contractor or high level free employee, slave owners generally gave one of their best slaves an incentive environment approximating that of a high level free employee, where the slave had a future career path, the opportunity to save and invest, to own money and buy assets, including buying other slaves, indicating that slavery does not work to get such tasks done – hence the failure of the Soviet Union.

However for many tasks, tasks suitable to stupid people, tasks for bad people, tasks where you want people to reliably do as they are told rather than make good decisions, the sort of tasks that most black people are suitable for, slavery was markedly more productive and efficient than free labor, with the slave producing more value for himself and his owner with less labor, than he did when freed.

When the slaves were freed, they became for the most part, considerably worse off economically, having to work harder and getting less to eat.

My! dem was good ol’ days.

Twarn’t long atter dat dey tell us we’se free. But lawdy, Cap’n, we ain’t nebber been what I calls free. ‘Cose ole marster didn’ own us no mo’, an’ all de folks soon scatter all ober, but iffen dey all lak me day still hafter wuk jes’ as hard, an some times hab less dan we useter hab when we stay on Marster John’s plantation.

Freedom is all right, but de niggers was better off befo’ surrender, kaze den dey was looked after an’ dey didn’ get in no trouble fightin’ an’ killin’ like dey do dese days. If a nigger cut up an’ got sassy in slavery times, his Ole Marse give him a good whippin’ an’ he went way back an’ set down an’ ‘haved hese’f. If he was sick, Marse an’ Mistis looked after him, an’ if he needed store medicine, it was bought an’ give to him; he didn’ have to pay nothin’. Dey didn’ even have to think ’bout clothes nor nothin’ like dat, dey was wove an’ made an’ give to dem. Maybe everybody’s Marse and Mistis wuzn’ good as Marse George and Mis’ Betsy, but dey was de same as a mammy an’ pappy to us niggers.

Source: American Slave: North Carolina Narratives14 (1): 284-290.

Economists find this outcome most strange, but there is no mystery to it.  When stupid people, prone to short time horizons, get to make their own decisions for themselves, they are apt to make stupid decisions.

A slave maid could not steal the silverware, because she could not own anything.  An employed maid could steal the silverware, and probably would, and would be the worse off for it.  An employed maid might well beat the baby with stick as thick as her arm because her mistress spoke sharply to her.  A slave maid would not, because her mistress could do worse.

If masters and slaves were better off than employers and employees, an economist would ask, why could they not just cut a deal to do what they previously did, only without chains and beatings, do the same tasks in the same way, only as employees?

The answer to that question is: that the former slaves, once freed, could not credibly commit to stick to such a deal, and generally did not stick to such a deal, thus economically worse off.  Stupid people, prone to violence, with short time horizons, needed masters.

15 Responses to “Economic efficiency of slavery”

  1. Bill J says:

    And the ignorant should not have free speech.

  2. Hannah says:

    If you think that slavery is such a good thing, Jim, then why don’t you become a slave? Or why don’t you tell your friends and family to become slaves? Seems to me like you’re just trying to justify your obvious racism. The sheer fact that you described African-American slaves as “stupid people, prone to violence, with short time horizons” is perfect proof of that. You do realize that there are plenty of white people out there who are stupid, prone to violence, and unable to plan for the future, don’t you? And you also realize that there are plenty of black people who are incredibly intelligent, peaceful, and accomplished, don’t you?

    • jim says:

      Well there are plenty of such black people – and they sold those that were not into slavery.

      • Hannah says:

        How come you ignored quite a few of my questions, Jim?

        • jim says:

          Because your questions were stupid and already answered in the original post, and assumed what I had already rejected: That all men are created equal and endowed with certain inalienable rights.

          Read the last statement in the essay: It answers all your questions.

          To answer your questions at greater length: Not all blacks were slaves, and not all whites were free. Indeed the number of whites enslaved by Muslims substantially exceeds the number of blacks enslaved by whites.

          Doubtless some blacks deserved freedom that were slaves, and some whites deserved slavery that were free, but in a large proportion of cases, probably most of them, slaves needed to be enslaved.

  3. Señor Moment says:

    Here is Stanley Engerman, co-author of _Time on the Cross_, talking about slavery with Russ Roberts on EconTalk. My understanding of Engerman is that a competently run slave plantation was more profitable than a farm that hired free workers because the plantation was a monopsony, but they were otherwise generally comparable. This does *not* make the plantation economically “efficient” in the Paretian sense.

    • jim says:

      If the slaves worked no harder, and were better taken care of, which appears to have been the case, then the plantation was economically efficient in the Paretian sense. The monoposony argument claims that the slaves worked harder or received less. This does not appear to have been the case.

  4. […] Jim Donald offers the Full Apology: “Stupid people, prone to violence, with short time horizons, needed […]

  5. haddox says:

    Not sure if you’ve read this book, but there’s significant intersection with the train of thought in this post.

  6. Dr. Faust says:

    Look at the mess made of the family from seeking equality. Equality doesn’t work. How long do you think a business would operate if everyone working there had a say in how it was run?

  7. Dystopia Max says:

    The Liberia solution was definitely the way to go. The Mexico solution-flooding El Norte with whoever was too useless to live in your country-was what happened.

    Of course, now that the Northern liberal cities are being destroyed, many of them are moving back down South none the more grateful than they were before. Maybe taking up a desperate underclass that in all likelihood was descended from the barbarians who destroyed the first African civilization wasn’t all that smart to begin with, no matter which side held them.

  8. Bob Wallace says:

    Whenever someone tells me that the Founding Fathers were “slave-owners,” I ask them, if slaves were free, who would hire them? How would they feed themselves and their families? Where would they live? What about the winter?

    I’m sure some people wanted to free their slaves but were stuck with them. What were they supposed to do? Turn them out to die?

    Many people never look at things in context.

    • KarmaKaiser says:

      Some of them would either have lived and worked, such as it was, in Africa. Or else be captured by the Arabian Slave Trade.

  9. Robert in Arabia says:

    I was chatting with a Sudanese gentleman recently about what we shared. In the Sudan, and in America, after slavery was abolished, slaves who had been happy with their masters took their master’s family names. Unhappy ex-slaves did not. People who chose Brown or Black or Freedman, etc., we the unhappy one.

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